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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: finfan who wrote (77023)	11/8/1998 8:08:00 AM
From: Mohan Marette	Respond to of 176387

finfan: I am by no means an expert on Options and do not dabble in such esoteric financial instruments,heck as it is I have a hard time following 4 or 5 stocks at a time. However there are many here who are very knowledgeable in this sort of thing like Don,Sig,LoD and many others,you may want to get a hold of them.

To: finfan who wrote (77023)	11/8/1998 10:12:00 AM
From: PMS Witch	Read Replies (1) \| Respond to of 176387

Naked puts: I'm short DLQ.MH (Jan99 40 Put) at the moment. I opened this position by selling at $7.5 when DELL was at $42. I plan to let this position expire in January. The last I looked, these options traded at $1.5 after DELL's climb to $65. A couple of thoughts: I was fully prepared (and able) to buy the shares at $32 if the market moved against me. I don't think it wise to become totally dependent on your stock to act a certain way to avoid doom -- mistakes can be made. Also, a short put position is more likely to be exercised early if the underlying stock falls. Your counterparty has no motivation to hold shares once the time value of her options has disappeared; she'll exercise and pocket the cash. A suggestion: Look at initiating a bull spread with Jan or Apr options. You'd be looking at putting up much less cash for a position with similar returns. Also, you'd survive to play again (and make it back) if you were wrong. If you're right, some money's in the bag and you get to play again. Hope this helps somewhat, PW.

To: finfan who wrote (77023)	11/8/1998 10:34:00 AM
From: JBird77777	Read Replies (1) \| Respond to of 176387

Investors who believe in Dell and like leverage through margin should consider selling long term out of the money covered calls (leaps) such as the Jan. 2001 90's (ZDEAR), and investing twice the proceeds (using margin) to buy more Dell stock. This process can be repeated several times, as more Dell stock is bought and corresponding covered calls sold. For example, assume that you own 100 shares of Dell, including 50 through margin. Sell 1 ZDEAR contract for about $1700 and buy $3400 / $65 = 52 shares of Dell. Assume Dell appreciates $5. Then the 52 shares of Dell appreciate 52 x $5 = $260. The contract will appreciate about 100 x $1.34 = $134; this is a loss of $134 to you. The net gain is $260 - $134 = $126. In effect, you will have a net gain of about half of the gross gain of the new Dell shares that you buy, and you will have invested no additional personal capital. You will have increased your overall net Dell return by about 25%. (These figures would be adjusted insignificantly over time due to commissions (using a deep discount broker), interest, and reduced time value of the leap contract.) JB